Tags: summer | bummer | cost | essentials

Gallup: Rising Cost of Essentials Is a Summer Bummer

By    |   Tuesday, 15 July 2014 12:43 PM

Americans are having less fun this summer as a higher cost of living squeezes discretionary spending, a Gallup poll reveals.

Nearly half of Americans are spending more than they were a year ago, but much of the extra money is going toward essential items.

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About 60 percent of Americans say they are spending more on groceries and fuel, which isn't surprising since a gallon of gas is 20 cents higher than last summer and the Department of Agriculture is projecting food prices could rise by up to 3.5 percent this year.

Rising fuel costs made this Fourth of July the most expensive for drivers since 2008, Time says AAA reported. And Americans had to spend more for the barbeque and beer.

Spending on utilities, healthcare and household items like cleaning supplies and toilet paper are also taking a bigger bite out of consumers' budgets, the Gallup poll reveals.

And nearly one-third of Americans have responded to the higher costs with slashed spending on travel, dining out, leisure activities and consumer electronics since last year, Gallup found.

This year's summer travel trends are a key indicator of the strain on Americans' wallets.

More people will travel this year than in 2009 in the midst of the recession, but nearly 40 percent will travel less than they did last year.

Many vacationers will get where they are going via the highway, as 81 percent claim that they will take a trip in their own vehicle.

For a lot of those people, it won't be much of a vacation, notes Gallup, because nearly one-third of travelers will spend one night or less on their trip.

The results of this poll paint a picture of consumers straining against rising prices on daily essentials to afford summer travel, dining out, and discretionary household purchases, the kinds of purchases that ordinarily keep an economy humming, says Gallup.

If there was any doubt the U.S. economy is still struggling to get back on its feet, these results reinforce reality, the firm added.

A healthy U.S. economy requires a healthy consumer appetite and current conditions are becoming a growing concern on Wall Street.

Many investors and strategists worry that American consumers just don't have the cash, or the willingness to spend it, that is required for the recovery to continue, CNBC reported.

Nicholas Cage, chief market strategist at ConvergEx Group, is among those with a rather bleak outlook.

“From a jobs perspective, things are slowly healing. But I do think that the desire to spend is still somewhat sketchy,” he told CNBC.com. “We're still at low levels of confidence compared to other recoveries,” he added. And given “slack consumer spending and a slower labor market,” Cage warned there's a chance of “a shallow U.S. recession starting early next year.”

Editor’s Note:
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Americans are having less fun this summer as a higher cost of living squeezes discretionary spending, a Gallup poll reveals.
summer, bummer, cost, essentials
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2014-43-15
Tuesday, 15 July 2014 12:43 PM
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